Xe — formerly Blackwater — fined $7.5 million over arms case

WASHINGTON — The security firm formerly known as Blackwater has agreed to pay a fine of $7.5 million to avoid US prosecution for smuggling arms, the Justice Department said in a statement Tuesday.

The company, now known as Academi, will pay the fine in addition to a previously agreed $42 million settlement with the State Department over violations of the Arms Export Control Act, the Justice Department said.

Under the agreement, the company previously known as Blackwater Worldwide and as Xe Services “admits certain facts” following a five-year, multi-agency federal investigation, said Thomas Walker, a prosecutor in North Carolina.

The probe “covered an array of criminal allegations,” some “involving the manufacture and shipment of short-barreled rifles, fully automatic weapons, armored helicopters, armored personnel carriers,” said the statement.

The company had also faced allegations under the Foreign Corrupt Practices Act regarding its conduct in Iraq and Sudan in relation to unlicensed training of foreign nationals and firearms violations.

Blackwater became notorious following a September 16, 2007 incident in which five of its guards protecting a US diplomatic convoy opened fire in Baghdad’s busy Nisur Square, killing at least 14 Iraqi civilians.

The company was then the largest private security firm employed by the Americans in Iraq, but it pulled out of the country in May 2009 after the State Department refused to renew its contracts.

The Nisur Square incident became a running sore among the Iraqi population, but the company always maintained that its guards opened fire in self-defense.

Blackwater Worldwide first changed its name — to Xe Services — in February 2009, following what it said was a change of business focus.

Critics suggested that the rebranding was an effort to polish an image tarnished by an alleged culture of lawlessness and lack of accountability among Blackwater staff.

The company then changed its name again — from Xe Services to Adacemi — in December 2011.